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Definition of 'middle class' is fuzzy

Candidates targeting workers

By Hope Yen
Associated Press writer

POSTED:July 19, 2012 3:00 p.m.

WASHINGTON (AP) — In a recent speech, President Barack Obama referred to the "middle class" 14 times, defining it as a family that makes up to $250,000 a year. Republican challenger Mitt Romney has looked at it from the other direction, saying that someone who falls into poverty "is still middle class."

In the fuzzy labels and loose speech of this political season, "middle class" has ballooned to cover just about everyone. So what does the term really mean?

There's no official definition.

If anything, a slew of economic data suggests a middle class that's actually shrinking. Mid-wage manufacturing and other jobs are disappearing due to automation and outsourcing, while lower-income positions and poverty spike higher. The White House's chief economist, Alan Krueger, said in January that the middle class fell from 50 percent of U.S. households in 1970 to 42 percent in 2010, as more families moved to the extreme ends of income distribution.

But it's not just about economic ranges. And politicians are not bound by such gauges anyway.

"Politicians love to use the term, because it's vague and connotes an image of regular American people." said Dennis Gilbert, a sociology professor at Hamilton College and author of "The American Class Structure in an Age of Growing Inequality." He said, the varying uses of "middle class" on the campaign trail are "dishonest, and it's absurd."

In recent months, the phrase has been popping up with increased frequency. Referring to the election as a "make-or-break" moment for the middle class, Obama used the term repeatedly in his July 9 speech calling for an extension of "middle-class" tax breaks for families making less than $250,000, or $200,000 for individuals — basically everyone but the top 2 percent. He mentioned the phrase seven times at a fundraiser Tuesday in San Antonio.

Romney has suggested that the upper bounds of the middle class include families earning $200,000. He's pushing an extension of the Bush-era tax cuts for everyone, including the wealthiest 2 percent. Romney's campaign seeks to highlight a weak economy that he says is a "kick in the gut to the middle class," with a new video this week attacking what he calls an Obama record of "political payoffs and middle-class layoffs."

Just Wednesday, Republican House Speaker John Boehner stepped into the fray with a comment that Obama "doesn't give a damn about middle-class Americans who are out there looking for work."

The meaning of "middle class" has grown even harder to parse following a populist Occupy movement that for months protested high unemployment and income inequality with a rallying cry of "We are the 99 percent."

Formal definitions vary, but few academics would say it covers more than 60 percent of Americans.

When it comes to earnings, the Census Bureau divides household income into quintiles, or groups of 20 percent. Some economists narrowly define the middle class as those in the middle 20 percent of the distribution, earning between $38,000 and $61,000. Others define it more broadly to include the middle 60 percent of the income distribution, between $20,000 and $100,000.

Defining who is poor, by contrast, is officially more absolute. The federal poverty line is based on the minimum income needed to have what the government considers a basic standard of living. Two times the poverty line is often a cutoff for "low-income" families who may be eligible for government aid. The poverty line currently is $22,314 for a family of four, meaning that a family making $44,000 could be both "low income" and "middle class."

Yet another way to gauge class is what income tax bracket you're in. The IRS has six of them. This year, the bottom bracket sets a tax rate of 10 percent for taxable income up to $17,400 for couples. The top bracket is 35 percent, applied to taxable income above $388,350. The middle class is commonly seen as falling in the 15 and 25 percent brackets, or couples whose taxable income is between $17,400 and $142,700. But some define it all the way up to the second-highest bracket, which is 33 percent and includes taxable income up to $388,350.

Sociologists take a broader view and focus not on income, but occupation: an "upper middle class" of white-collar specialists (lawyers, engineers, professors, economists and architects); and a "middle class" of lower-level white-collar workers (teachers, nurses, insurance sales and real estate agents). Together, these groups make up about 45 percent of households and sit near the upper end of the income distribution, just behind the top 1 percent.

The meanings shift more dramatically when measured by self-identification and quality of life.

Few Americans label themselves as upper class or lower class, which are seen as either pretentious or demeaning. Roughly 95 percent of adults say they are middle class (50 percent), upper middle class (13 percent) or working class (32 percent), according to a Washington Post-ABC News poll conducted in May. Just 2 percent describe themselves as "better off" than upper middle class.

A separate ABC News poll found that being "middle class" often meant more to people than specific income levels, which can be affected by family size, expenses and local costs of living. At least two-thirds of adults said being middle class meant owning a home, being able to save for the future and afford things like vacation travel, the occasional new car and various other little luxuries, according to the 2010 poll.

The slippery definitions have created incongruous political moments.

In his January speech describing a shrinking middle class, Krueger, who is chairman of the White House Council of Economic Advisers, offered a precise definition that has yet to be applied on the campaign trail: households with annual incomes within 50 percent of the national median income. The current median income is $49,445, putting middle-class earnings in a range from $25,000 to $75,000.

Democrats from higher cost-of-living areas, such as Sen. Chuck Schumer and House Minority Leader Nancy Pelosi, have sought to push the "middle class" definition higher, arguing that some families earning between $250,000 and $1 million in big cities such as New York and San Francisco are more likely to be dual-income worker bees than a wealthy elite. They initially pushed for extending tax cuts for those with incomes under $1 million, but are now backing Obama's proposal, which would yield an additional $366 billion in tax revenue over the next decade.

Romney, who sometimes battles perceptions that his vast wealth makes him out of touch, stirred derisive comments when he told MSNBC in January that he wasn't focusing so much on the needs of the poor. He explained that "somebody who's fallen from the middle class to poverty, in my opinion, is still middle class." Liberal bloggers were quick to ridicule the idea of "middle-class poverty."

"'Middle class' in politics is not a numerical value," said Kathleen Hall Jamieson, director of the Annenberg Public Policy Center at the University of Pennsylvania. "When voters hear 'middle class,' they don't hear people who make above or below this amount of money, they hear 'us.' It's a way for politicians to signal to voters that 'I share your values.'"

But Jamieson says the fuzzy meanings confuse public debate, whether it's about spending for government safety-net programs for the poor, balancing the federal budget by taxing a wider range of income earners or creating jobs for an American middle class with varying degrees of education and skill levels. "That kind of slipperiness creates a disconnect between campaigning and governance," she said.